A+ Answers of the following Questions

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1. The focus of ABC systems is on:
A. Long-term decisions
B. Short-term decisions
C. Make-or-buy decisions
D. Special-pricing decisions


2. It ONLY makes sense to implement an ABC system when:
A. ABC provides information to make better decisions
B. Its benefits exceed implementation costs
C. ABC traces more costs as direct costs
D. There is a strong cause-and-effect relationship between costs in the cost pools and their cost-allocation bases

 

 

3. Units of production are most appropriate as a support cost assignment base when:
A. It is a service department
B. Only one product is manufactured
C. Direct labor costs are low
D. Factories produce a complex and varied mix of products

Penn Foster 06041901 Answers

 

 

 

The Rebus Co. is trying to decide between the following two mutually exclusive projects:

Cash Flows
Year Project I Project II
0 -$18,000 -$12,000
1 $8,500 $6,500
2 $9,000 $6,000
3 $9,500 $7,000

The only requirement the company has is that any project that is accepted must produce a minimum rate of return of 11%. 

Calculate payback period, discounted payback period, IRR and NPV, as well as any other measures which would be helpful. 

Fill in the following table with your results:

Year Project I Project II
Payback (yrs.)
Discounted Payback (yrs.)
IRR
NPV

What should the company do and why?

Penn Foster 00803602 Answers

 

Penn Foster 00803701 Answers

 

1. ________ and ________ are typically the measures of volume of activity in traditional volume-based cost systems.
A. Practical capacity; products sold
B. Direct labor hours; practical capacity
C. Direct labor hours; machine hours
D. Square footage; machine hours

 


2. Traditional cost systems distort product costs because:
A. They do not know how to identify the appropriate units

    • 10 years ago
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